REALTORS® release yearly review of home sales
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While home sales were sluggish during the second half of 2010, the market for Utah real estate appears to be in a much better place today than it was one year ago.
Each year, the Utah Association of REALTORS® releases a report looking at the sales activity for the January-to-December period. In 2010, buyers clearly had the upper hand. The median price was down about 5 percent, with homes selling for a median of $189,000 compared to $199,000 in 2009.
The effect of record-low interest rates made buying conditions even better for consumers who purchased real estate in 2010. According to the UAR’s Housing Affordability Index, homes were more than 9 percent more affordable for Utah families than they were in 2009. This measure takes into account incomes, home prices and interest rates.
During the first half of the year, first-time buyers also had the added benefit of a tax credit worth up to $8,000. Repeat buyers who met certain conditions could also qualify for up to $6,500. This government incentive led to higher sales during the first half of 2010. At the end of June, sales were up about 3 percent compared to the first half of 2009.
As the effects of the tax credit wore off, however, sales became sluggish and were down about 4 percent for the entire year compared to 2009. During the entirety of 2010, Utah REALTORS® sold 29,861 homes.
There are signs, however, that the market may be beginning to gain steam, even without the support of a government tax credit. Pending home sales, a measure that tracks future housing activity, were up 17.5 percent in December compared to December 2009. That means buyers signed more contracts to purchase homes than they did during the same time the previous year. As these deals become final, we should expect to see these contracts translate into higher home sales activity.
The report also suggested that buyers not wait too long to make their move. The supply of homes for sale, while still plentiful, is coming down, which means it may be harder to get the perfect home for the best price.
In December, there were 24,615 active listings available for sale in Utah. That’s down more than 6 percent from the same time in 2009. In fact, this is the fewest number of homes that have been on the market since mid-2007.
The pace of the sales is also improving. In December, it would have taken 9.7 months to sell all the homes on the market. This is the lowest month’s supply for the state since early 2008. Economists say prices stabilize when the month’s supply of inventory is less than 10 months. Prices begin to increase as this number gets even lower.
Home sellers are also receiving offers closer to their listing prices, although the improvement here is slight. In 2009, sellers received 90.3 percent of original list price; in 2010, this figure jumped to 90.6 percent.
While there are signs of renewed interest in the market, one of the biggest predictors of future housing activity will be the overall economic recovery. As jobs are created, consumers will begin to feel confident in buying homes, which will help release some of the pent-up demand.
In 2011, the Utah Department of Workforce Services projects the number of jobs in the state will increase by 17,000 and by another 28,000 in 2012. In 2011, Utah’s unemployment rate is expected to drop from 7.6 percent to 7.1 percent.
As we have begun to see some signs of stabilization in the market, it will be great to see what happens during the most active time for real estate buyers: the spring home-buying season. I’m guessing we can expect to see many buyers who will be looking for a good deal before prices and interest rates rise.
To learn more about home-buying conditions in your own neighborhood, contact your local REALTOR®. To read more articles about the market and to find a REALTOR®, visit the UAR’s consumer Web site, www.GoAskLilly.com.
By Kenny Parcell
Appeared in the Salt Lake Tribune and Deseret News February 5, 2011
February 7, 2011 | Share: